Dixons Carphone – where management is failing miserably

SUMMARY:

Nearly three years on and Dixons Carphone internal POS systems are not integrated. It’s frustrating for customers but is even worse for staff. The problems don’t stop at systems.

dixon carphoneAs part of the presentation that accompanied the upbeat Dixons Carphone report covering the Christmas 2016/17 trading and management update, the company said that progress was being made on systems integration and that in Leeds, the company had a successful launch of its phone and iPhone repair proposition.

Unsurprisingly, analysts were pleased:

Analysts at Liberum pointed out that Dixons Carphone’s Christmas trading “has come in at nearly double our expectations reflecting the continued momentum within the business and further market share gains.”

In a note to clients, they added: “Management has confirmed guidance in line with market expectations, although given the current LFL growth run-rate we see strong upside risk.”

When the Dixons/Carphone merger was announced in 2014, the company hitched the deal onto an Internet of Things meme. At the time, Stuart Lauchlan said:

Certainly watching the presentation by the management teams of both firms, I was less than convinced that the IoT angle was very much more than a convenient hook upon which to hang this merger, even if the basic theory expounded about connectivity and the new world of online devices was essentially sound.

Nearly three years later, let’s see how prescient Lauchlan’s words turned out to be.

A good test is the shop floor. So what’s happening in the real world on the Dixons Carphone shop floor? Let me recount an experience at one of the local stores. But first let me preface by saying that having been away from the UK a number of years, I wasn’t really up to speed with physical changes on the white goods High Street, Or as it mostly seems to be these days, an anonymous out of town trading park.

First, I notice that contrary to the merged company’s intertwined logo (see image above), the stores are carrying the old Currys/PC World outdoors signage. In fairness, the recent presentation had nothing to say about brand.

The company may be making big noises about sex and sizzle in the form of the connected home but inside the store there was precious little stock on hand and barely enough that anyone interested could make a complete home upgrade purchase for heating control – a current area of interest.

But it is on the phone end of things where life is really tough for both customer and staff. I wanted a protective cover for a Galaxy S7 Edge – please note, that’s NOT the one that represents a fire hazard. Having found the goods, I needed someone to release the shop fixture anti-theft lock.

Unfortunately, there was only one person available on what is the Carphone part of the business and he was helping a customer with a complex buying decision. In front of me was another person. I hailed another employee who told me that he doesn’t work for the Carphone part of the business so couldn’t help me. Seeing the backup of people in line, he used his initiative to cut into the Carphone person’s conversation, asking for the key to unlock the goods I need. The alternative was for me to walk away. He could not however put the sale through the Dixons till.

Once the first person was sent on his way, the Carphone person attempted to help the next in line with a possible iPhone repair. He said:

We can take it in for sure and if it’s under warranty it will be handled for free but to be honest you’ll get a better service from Apple.

I was astonished but smiled at the honesty. And, to be fair, I agree. Apple provides far better service than any of its third party partners.

On to me. I asked why my sale couldn’t go through the normal Dixons till. The answer was surprising yet banal and all too familiar:

There are two systems and they don’t work together but we’re also two organizations that don’t work together. We don’t even share the same T-shirts. It breeds an ‘us and them’ atmosphere that no-one likes.

Joe Punter could care less and for a purchase of that kind, I’m guessing that many buyers would have walked at the first hurdle and almost certainly all at the second. Why I hung around is anyone’s guess. Perhaps I had a masochistic retail moment? Even so, the conversation was getting interesting so I mumbled:

Yeah, well, big company systems integrations are often hard.

The shot back response?

Yeah, well this management couldn’t organize a piss up in a brewery. They make it hard for us to do our job and leave us no room for actually managing our patches the way it works best. We know the Dixons folk and want their help from time to time but it’s impossible. You just saw it – it’s embarrassing.

The other day I got a bollocking for letting someone leave the building at end of night through the front door when the standard practice is we all go out the back door. I explained the person is a newbie and hasn’t a clue where anything is except the front door. It’s petty.

It’s not often that frustrations spill over into customer conversations but I was curious to understand why this person, who was trying to be helpful and apologetic about wait time, would carry on working in such an environment.

I need to work and I want to work so I can pay my way and maybe have a good night out once a month. I don’t want to be unemployed so yeah, I put up with crap and hope that things will get better.

I walked away from the experience wishing the fellow good luck as he wrestled with ‘the man’ and his rigid processes but with a profound sense of gloom. We’re in the 21st century. We’re supposed to be moving towards collaborative workspaces with systems that help make that a reality. We’re supposed to view staff as valuable contributors, not low paid droids to be crapped on from time to time. Aren’t we?

In Dixons Carphone reports, the company talks about lean operations and a ‘flexible workforce.’ I have no clue what that is supposed to mean but it sure sounds good on investor calls. But equally, I wonder just how much more efficient and effective the business could be if they had happier staff who are rewarded for thinking beyond the rigidity of the processes they have to execute against.

Instead, the company prefers to big up its online presence and fulfillment operations. All that’s good and well and yes, the online experience is better than I had expected with inventory visibility helpfully shown along with delivery and collection options. But that isn’t omni-channel, that’s e-c0mmerce and regardless of what we see from the likes of Amazon, the fact is there is a large section of people who will visit stores for white goods purchases or collections.

Managing the frustrations reminded me of how we used to get stuff done back in the days when inflexible IT departments and long lead times meant that we needed informal help. The phrase ‘Betty in the corner’ emerged as indicative of someone who through years of experience knew ways to get around the inflexible processes and who helped anyone who asked, even though that wasn’t her primary job. Management never really knew about Betty as I am sure they don’t know about the person I met. In that regard, management is missing opportunities to do better, and, I would argue, demonstrably better.

All of which brings me to my final observation. Top management in large companies have almost no visibility into what is really going on. How can they when the shop floor is 5, 6 and 7 layers down. But when that ignorance translates into clap happy analyst speak I have to ask the question: Who are you kidding?

Image credit - via Dixon Carphone presentations.

    Comments are closed.

    1. Stephen Cross says:

      What a poor article and read this is. Where’s the research? You’ve echoed the view of one guy having a bad day in a shop. Shoddy journalism at its very worst for me.

    2. says:

      Au contraire mon petit. It is a fact that neither organization is integrated and neither are the POS systems. the company itself nods to the fact in its own public slides.

      Are you seriously trying to tell me that isn’t going to lead to issues? We’ve seen this many times before elsewhere. It’s a common cause of failure.

    3. Dixons Carphone management failing to deal with post merger systems integration is also an indictment of how plenty of implemented enterprise software is still constructed as monoliths, unable to adapt or scale out

      Someone: Amazon, Alibaba or Apple and others could help solve this by packaging their own web scale ecommerce/POS systems as SaaS.

      By Jeff Bezos edict, Amazon’s internal systems have to be developed to interoperate via consumable APIs and ‘PaaS’ configuration.

    4. J Smith says:

      When you can’t even get the name of your own phone correct, it raises questions on everything else.